Slide 2.

Chapter 2

Online marketplace analysis:

Micro-environment

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Learning objectives
• Identify the elements of an organisation’s online
marketplace that have implications for eveloping
a digital marketing strategy
• Evaluate techniques for reviewing the
importance of different actors in the
microenvironment: customers, intermediaries,
suppliers and competitors as part of the
development of digital marketing strategy
• Review changes to business and revenue
models enabled by digital markets.

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Questions for marketers

• What are our capabilities for understanding our online
marketplace?
• How relevant is the behaviour of the actors in the micro-
environment to the future of our business?
• How do I complete a marketplace analysis and how
does this inform our digital marketing planning?
• How are customers’ needs changing as digital platforms
develop and what are the implications of such changes?
• How do I compare our online marketing with that of our
competitors?
• How do we find suitable intermediaries at the planning
stage of a digital marketing strategy?

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Scenario for marketplace analysis

• You have been appointed by Blackcircles.com
as digital marketing manager.
• Your task is to create a digital marketing plan for
the next year and beyond
• What would you need to review about the online
marketplace to help create your plan?

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.1 Blackcircles.com

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Figure 2.2 The Internet marketing environment

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Figure 2.3 An online marketplace map

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Correlation between search volume in Google Trends and retail

Figure 2.4
sales volume
Source: Chamberlin (2010)

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Example searches – implications?

Table 2.1 Top 10 search terms for all retailing and for apparel

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Tools for marketplace analysis

• Google Agency Tookit
– http://www.google.com/ads/agency/toolkit.html
– Key Tools:
http://www.smartinsights.com/marketplace-analysis/g
oogle-tools-you-may-not-know-about/
• Alexa: www.alexa.com or www.compete.com
• Hitwise: www.hitwise.com
• Nielsen: www.nielsen-netratings.com
• Comscore: www.comscore.com Press releases
• IMRG: www.imrg.org

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Issues in analysing the online marketplace

Table 2.3 The micro-environment: issues for digital marketers

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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A model of the Internet marketing conversion process. It shows key traffic or

Figure 2.5
audience measures (Q0 to Q4), first-time visitors (Q2) and repeat visitors (Q2R) and key
conversion efficiency ratios
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.6 An example of a conversion model

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Evaluating demand levels

• Level of Internet access
– Includes type of access – broadband and mobile
• Consumers influenced by using online channel
– Includes understanding type of sites which have
influence
• Transact online
– Includes different types of transactions, not just
sales, e.g. support, forum comments, etc.

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Model showing conversion between the digital channel and traditional

Figure 2.7
channels during the buying process
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Figure 2.8 Research Online Purchase Online example

Source: Google, 2010

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.9 Variation of broadband penetration in different countries

Source: OECD (http://www.oecd.org/sti/ict/broadband)

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.10 Consumer Internet Activities

Source: http://internet2go.net/ (accessed 31 May 2011)

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.11 Development of experience in Internet use

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Figure 2.12 Reasons for and for not purchasing over the Internet in the UK
Source: Chamberlin 2010

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Consumer characteristics
• Demographics:
– Age, gender, social group
• Webographics
– Access methods and times
• Personas:
– Dulux example

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Figure 2.13 Internet use by businesses in European countries

Source: European Commission, 2009

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Dulux persona example

• Aims:
– The aim was to position Dulux.co.uk (Figure 2.13) as “the
online destination for colour scheming and visualisation to
help you achieve your individual style from the comfort of
your home”. Specific outcomes on the site are to browse
colours, add colours to a personal scrapbook, use the paint
calculator and find a stockist. Further aims were to ‘win the
war before the store’i.e. to provide colour help tools that
can help develop a preference for Dulux before consumers
are in-store and to prompt other ideas to sell more than
one colour at a time.
– Specific SMART objectives were to increase the number of
Unique Visitors from 1M p.a. in 2003 to 3.5M p.a. in 2006
and To drive 12% of visitors to a desired outcome (e.g.
ordering swatches).

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.14 Dulux site (www.dulux.co.uk)

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Target audience variation

Based on research, it was found that the main audience for the site
was female with these typical demographics and psychographics:
• Would be adventurous 25-44 women, online
• Lack of confidence with previous site:
• - Gap between inspiration (TV, magazines, advertising) and lived
experience (Large DIY sheds,nervous discomfort)
• - No guidance or reassurance previously available currently on their
journey
• Colours and colour combining is key
• Online is a well-used channel for help and guidance on other topics
• 12 month decorating cycle
• Propensity to socialise
• Quality, technical innovation and scientific proficiency of Dulux is a
given

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Example personas
• First time buyer.
– Penny Edwards, Age: 27, Partner: Ben, Location:
North London, Occupation: Sales Assistant
• Part time Mum.
– Jane Lawrence, Age: 37, Husband: Joe, Location:
Manchester, Occupation: Part time PR consultant
• Single Mum.
– Rachel Wilson, Age: 40, Location: Reading,
Occupation: Business Analyst

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Business consumer characteristics

• Variation in organisation characteristics
– size of company (employees or turnover)
– industry sector and products
– organisation type (private, public, government, not-for-profit)
– application of service (which business activities do purchased
products and services support?)
– country and region.
• Individual role
– role and responsibility from job title, function or number of staff
managed
– role in buying decision (purchasing influence)
– department
– product interest
– demographics: age, sex and possibly social group.

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Consumer behaviour models

• Information / experience seeking behaviour
models
• Hierarchy of response buying process models
• Multi-channel buying models
• Trust-based models
• Community participation models

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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1. Information / experience seeking

behaviour models
• Directed information-seekers. These users will be looking for product,
market or leisure information such as details of their football club’s fixtures.
They are not typically planning to buy online.
• Undirected information-seekers. These are the users, usually referred to as
‘surfers’, who like to browse and change sites by following hyperlinks.
Members of this group tend to be novice users (but not exclusively so) and
they may be more likely to click on banner advertisements.
• Directed buyers. These buyers are online to purchase specific products
online. For such users, brokers or cybermediaries that compare product
features and prices will be important locations to visit.
• Bargain hunters. These users (sometimes known as ‘compers’) want to find
the offers available from sales promotions such as free samples or
competitions. For example, the MyOffers site (www.myoffers.co.uk) is
used by many brands to generate awareness and interest from consumers.
• Entertainment seekers. These are users looking to interact with the Web for
enjoyment through entering contests such as quizzes, puzzles or interactive
multi-player games.

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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2. Hierarchy of response buying process models

A summary of how the Internet can impact on the buying process

Figure 2.15
for a new purchaser

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Figure 2.16 Initial product search showing e-retailers available

Source: Google, 2011

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Figure 2.17 Currys’ product category page (www.currys.co.uk)

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3 Multichannel buying models

Table 2.5 The impact of channel experience on customer relationship

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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4 Trust-based models

Figure 2.19 Segmentation based on information need and trust

Source: Adapted from Forrester (2006) Teleconference Driving Sales With SegmentationAnalyst: Benjamin Ensor of Forrester Research, 27 February 2006

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Competitor benchmarking
• Activity – which aspects of a competitors online
marketing activity should be reviewed?
–
–
–
–
–
–

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Suggested benchmarking activities

Benchmarking tools:
See: http://www.smartinsights.com/marketplace-analysis/competitor-analysis/online-competitor-benchmarking-tools/

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.20 Benchmark comparison of corporate websites

Source: Bowen Craggs & Co (www.bowencraggs.com)

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Figure 2.21 Taobao (www.allthingsgreen.net)

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Types of portal

Table 2.8 Portal characteristics

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Disintermediation of a consumer distribution channel showing: (a) the

Figure 2.22
original situation, (b) disintermediation omitting the wholesaler,
and (c) disintermediation omitting both wholesaler and retailer
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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From (a) original situation to (b) disintermediation or

Figure 2.23
(c) reintermediation or countermediation

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Example of a channel chain map for consumers selecting an

Figure 2.24
estate agents to sell their property

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Porter’s five forces

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Impact of the Internet on the five

competitive forces

Table 2.7 Impact of the Internet on the five competitive forces

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
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Figure 2.25 Different types of online trading location

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Figure 2.26 Alternative perspectives on business models

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Publisher revenue models

• Revenue from subscription access to content.
• Revenue from Pay Per View access to documents.
• Revenue from CPM display advertising on site (e.g. banners ads,
skyscrapers or rich media).
• CPM stands for ‘cost per thousand’ where M denotes ‘Mille’.
• Revenue from CPC advertising on site (pay per click text ads)
• CPC stands for ‘Cost Per Click’. Advertisers are charged not simply
for the number of times their ads are displayed, but according to the
number of times they are clicked.
• Revenue from Sponsorship of site sections or content types
(typically fixed fee for a period) –
• Affiliate revenue (typically CPA, but could be CPC)
• Affiliate revenue is commission based, for example if you display
links to Amazon books on your site, you can receive around 5% of
the cover price as a fee from Amazon. Such an arrangement is
sometimes known as Cost Per Acquisition (CPA). Amazon, and
others offer a tiered scheme where the affiliate is incentivised to
gain more revenue, the more they sell. Hence this is often called a
pay-per-performance ad deal.
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Figure 2.27 Revenue model spreadsheet

Source: SmartInsights.com

Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013